Former Ecuadorian Judge Admits Role in Orchestrating Fraudulent Judgment Against Chevron

SAN RAMON, Calif., January 28, 2013 – A former Ecuadorian judge has acknowledged his direct involvement in orchestrating a fraudulent judgment against Chevron Corp. (NYSE: CVX) in the environmental trial against the company in Lago Agrio, Ecuador.

In a sworn declaration filed today in New York federal court, Alberto Guerra, who presided over the case when it was first filed in 2003, reveals that he was paid thousands of dollars by the plaintiffs' lawyers and a subsequent judge, Nicholas Zambrano, for illegally ghostwriting judicial orders issued by Zambrano and steering the case in the plaintiffs' favor. Guerra, who is no longer a judge, attests that the plaintiffs' lawyers were permitted to draft the $18 billion judgment in their own favor after they promised to pay Zambrano a $500,000 bribe out of the judgment's enforcement proceeds, and that Guerra then reviewed the plaintiffs' lawyers draft for Zambrano before the judge issued it as his own.

"Another participant in the fraud has now come forward rather than wait to be exposed by others," said Hewitt Pate, Chevron vice president and general counsel. "Chevron urges additional whistleblowers in Ecuador, the United States, and elsewhere to come forward. It is never too late to tell the truth."

Guerra's declaration, which is corroborated by computer, bank, and shipping records, as well as the plaintiffs' lawyers' own internal e-mails, provides a direct account of corruption that has tainted the trial for years. Guerra describes multiple meetings with the plaintiffs' lawyers and representatives – namely, New York-based Steven Donziger, Pablo Fajardo, and Luis Yanza – to discuss payoffs, kickbacks, and the ghostwriting of court orders favorable to the plaintiffs. Guerra attests:

"I was Mr. Zambrano's 'ghostwriter' and I wrote the great majority of the rulings issued in civil cases assigned to Mr. Zambrano, including the Chevron case."

"Mr. Donziger thanked me for my work as ghostwriter in this case and for helping steer the case in favor of the Plaintiffs'[sic]. The payments from the Plaintiffs' representatives were given to me by Mr. Fajardo in cash, or were deposited into my savings account at Banco Pichincha. I remember that while I was writing court rulings for Mr. Zambrano I would regularly meet with Mr. Fajardo, perhaps twice per month, to discuss my work."

"Mr. Zambrano told me he was in direct contact with Mr. Fajardo and that the Plaintiffs' representatives had agreed to pay him USD $500,000 from whatever money they were to collect from the judgment, in exchange for allowing them to write the judgment in the Plaintiffs' favor."

"Approximately two weeks before the trial court in the Chevron case issued the judgment, Mr. Zambrano gave me a draft of the judgment so that I could revise it. It was through him that I found out that the attorneys for the Plaintiffs had written that judgment and had delivered it to him."

"I worked on that document in Mr. Zambrano's residence in Lago Agrio using Mr. Fajardo's computer."

"Based on what Mr. Zambrano told me, it is my understanding that the Plaintiffs' attorneys made changes to the judgment up to the very last minute before it was published."

"I knew at the time, and I know now, that the agreement in which I participated, and by which the Plaintiffs' representatives drafted the judgment in the Chevron case which Judge Zambrano issued, with my help, was a violation of Ecuadorian law. According to Ecuadoran law, only a judge is authorized to write rulings and judgments. For these same reasons I knew at the time, as I know now, that the arrangement in which I participated, whereby I drafted court rulings for Mr. Zambrano steering the case in favor of the Plaintiffs, and was paid by the Plaintiffs' representatives for that work, was a violation of Ecuadoran law. And I knew at that time, as I know now, that the agreement that Mr. Zambrano told me he had reached with the representatives' attorneys, to let them draft the judgment in favor of the Plaintiffs and against Chevron, in exchange for him receiving USD $500,000 once they collected the money from the judgment, was a violation of Ecuadoran law."

One year after issuing the judgment against Chevron, Zambrano was dismissed from the bench as part of an organized crime commission investigation involving the inappropriate release of narcotics traffickers from prison.

Guerra's account is corroborated by contemporaneous documentary evidence. For example, his computer contains drafts of numerous court orders Zambrano issued, including in the Lago Agrio case. And his bank records (here, here, here, and here) document payments made to him by a representative of the plaintiffs. Shipping records and Guerra's calendar further corroborate his testimony.

Sworn statements by several other witnesses also corroborate Guerra's account. Chevron's Ecuadorian lawyers and others known to them now attest to the fact that, at various times during Zambrano's tenures on the case, Guerra directly approached them to solicit bribes on Zambrano's behalf in order to fix the Lago Agrio judgment, and that Chevron refused Guerra's approaches. Moreover, contemporaneous declarations (here and here) from two of Chevron's Ecuadorian lawyers described the failed bribery solicitations at the time they occurred. These several witnesses attest in their sworn statements that Chevron flatly rejected Guerra's repeated bribe solicitations on behalf of Zambrano.

Guerra's testimony and corroborating evidence confirm what the extensive overlap between the plaintiffs' lawyers' internal files and the judgment itself already supported – that the plaintiffs' lawyers corrupted the Ecuadorian court and actually wrote the $18 billion judgment against Chevron.

Contemporaneous e-mails between the plaintiffs' lawyers and representatives, produced through court-ordered discovery in the United States, also corroborate Guerra's declaration. When another judge had to recuse himself from the case in the midst of a bribery solicitation scandal and Zambrano was poised to resume presiding over it, the plaintiffs' lawyers identified "Guerra" by name as a potential target to influence the case's ultimate ruling. The plaintiffs' lawyers even assigned code names to Zambrano and Guerra, referring to them as the "puppeteer" and the "puppet." On October 27, 2009, Fajardo sent Donziger and Yanza an e-mail stating, "The puppeteer won't move his puppet until the audience doesn't [sic] pay him something." On November 27, 2009, Yanza sent Donziger an e-mail warning him about increased costs due to paying the "puppeteer."

This revelation is the latest in a recent series of instances where individuals and groups formerly aligned with the plaintiffs have either accused the plaintiffs' lawyers of fraud or provided first-hand accounts of corruption tainting the trial and judgment. Earlier this month, it was revealed that Burford Capital, one of the largest financial backers of the plaintiffs, accused the plaintiffs' lawyers of fraud and other misconduct in connection with their pursuit of their case. In December, a former environmental consultant to the plaintiffs came forward with additional proof of fraud and the fabrication of evidence on the part of the plaintiffs' lawyers.

Because of the risks to Guerra and his family from coming forward, Chevron has taken reasonable measures, based on third-party assessments, to protect Guerra's safety and security, and that of his family, including relocating them from Ecuador and providing other assistance. In exchange for collecting and turning over hard evidence corroborating his account, including his personal computer, two cell phones, his day calendars, and bank, phone and shipping records, Guerra received a total of $38,000 from Chevron, but as Guerra affirms, he has "not . . . received any money or compensation in exchange for signing this sworn declaration."

Additional evidence produced by the plaintiffs' American lawyers provides corroborating proof that the Lago Agrio plaintiffs' representatives participated in drafting the judgment. In at least eight separate instances, the judgment tracks the plaintiffs' lawyers' own documents, in some cases word-for-word, reciting content from the plaintiffs' lawyers' internal materials that did not form part of the record, as well as copying errors and idiosyncratic reference citations that only appeared in the plaintiffs' internal documents.

Chevron intends to provide all of this evidence to Ecuador's Prosecutor General and to request that his office investigate Zambrano and the plaintiffs' lawyers. The company has provided similar evidence of fraud, corruption, and attorney misconduct to authorities in Ecuador in the past, but to date, the government there has taken no apparent action to enforce its laws.

"Chevron once again calls on Ecuadorian authorities, and authorities wherever these plaintiffs' lawyers are trying to advance their fraud, to investigate and bring an end to this scheme," said Pate. "Ecuador should not tolerate American lawyers using Ecuador's institutions and citizens as puppets."

In now coming forward, Guerra has also agreed to make himself available to appear before other courts, tribunals, and investigators if requested to do so.

Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.